Volcker and Soros on Financial Innovation

“I am a man of the markets, and I abhor bureaucratic restrictions. I try to find my way around them. … But I do believe that financial markets are inherently unstable; I also recognize that regulations are inherently flawed: Therefore stability ultimately depends on a cat-and-mouse game between markets and regulators. Given the ineptitude of regulators, there is some merit in narrowing the scope and slowing down the rate of financial innovations.”

And here’s Volcker (p. 160), as paraphrased by Morris:

“He scoffed at the notion that clamping down on banks, hedge funds, and other players would stifle ‘innovation.’ The only innovation that real people cared about for the previous twenty or thirty years, he said, was ‘the automatic teller machine.’”